Tuesday, June 09, 2015

Au revoir, Kmart

CNN reports that sales at Kmart and Sears stores have imploded. Well, yes, if your advertisements show the "same junk as Wal-Mart" with a 1970s era sign saying "get yer polyester here!" to everyone who remembers, good luck keeping the stores open.

And really, Kmart hasn't been very relevant to my life, ever. I remember the bankruptcy--thinking "good riddance" of course--and than was appalled that they gobbled up a decent store like Sears in the process. Regrettably, I've been close to right about the outcome--Sears would get their prices and Kmart's products.

The good news is that the companies are eligible for bankruptcy again, so maybe someone can buy them for pennies on the dollar and make them worthwhile again. Well, at least Sears.

Interesting bit of trivia — Kmart, Walmart and Target all opened their first stores in 1962. They've ended up in different places, to say the least. I think there's a reason for that and it comes from the origins of these companies and the leaders that set them on their respective paths.

Kmart started as a subsidiary of S.S. Kresge, a nationwide chain of five-and-dime stores. Kmart never got past that model, I think — sell cheap stuff and don't pay a lot of attention to detail. And it's bitten them in the butt.

Walmart started out of the small-town general store format, which meant two things — they were more attentive to what the small-town customer thinks and wants, and they always understood that the largest challenge in retail is making sure you stay in-stock on items. In most cases, if you walk into a Walmart seeking a specific item, you'l find it.

Target started out as a subsidiary of Dayton's, a traditional upscale department store chain. What's important to a department store — quality of merchandise, attention to detail, customer service and the like — was always part of Target's approach. It's the reason why Target stores are less sloppy looking than either Kmart or Walmart. In better economic times, it's also a point of differentiation that allowed Target to charge just a little bit more than Walmart and still get by it. In tougher times, people will try to save that little bit more, so Target has suffered.

Thanks for the comments--I'd agree that the five and dime model bites Kmart on the rear, but it probably doesn't help that they're basically part of a holding company now, too. So the steps they need to take to remain relevant are doubly tough, methinks.